Professor Duy released the U of O Index of Economic Indicators for December this week.
The University of Oregon Index of Economic Indicators™ rose 1.2 percent in December to 86.8 (1997=100) from a revised November figure of 85.8. Since reaching a low in July 2009, the UO Index has risen for five consecutive months as the Oregon economy pulled out of recession.
As a general rule of thumb, a decline of 2.5 percent (annualized) over six months, coupled with a decline in more than half of its components, signals that a recession is likely imminent.
On the job market
Labor markets firmed somewhat during December, showing welcome but modest signs of improvement. Initial unemployment claims continue to edge down, signaling a slow but steady reduction in the pace of layoffs, although they still remain above the highest levels of the 2001 recession. Notably, employment services payrolls—largely temporary imployment firms—extended the previous month’s modest improvement, rising to the highest level since last July. This is a sign that some firms need to bolster their workforce in the face of firming economic activity. Still, unemployment remains high, and will only be reduced with many months of sustained job growth.
On housing starts
Residential building permits (smoothed) rose again, continuing the path of improvement that began in October 2009. It is increasingly likely that new residential construction markets bottomed last fall, although it is important to note that activity remains well below the height reached during the recent housing boom. The December 2009 level of 678 permits compares to 2,651 permits in December 2005.
It sounds like the bottom is here for construction permits. This is one of the the 'market bottoms' I've been tracking. The other two are sales volume and median sales price (more on those two when the Market Action Report is released in a few weeks).
Please visit the blog on Monday for some exciting news about the future of the blog.